Futures Fall as Bailout Remains Uncertain
Stocks looked set to start Wednesday in the red with investors at the mercy of progress on the proposed government financial bailout package.
Private U.S. employers clipped 8,000 jobs from their payrollsin September, a surprisingly low figure, ADP reported. Mortgage applications dropped to their lowest in a month, the Mortgage Bankers Association said, amid anxiety about the health of the economy
Applications for U.S. home mortgages last week dropped to their lowest in a month as interest rates hovered above levels that had sparked heavier refinancings in early September, according to data published by an industry group on Wednesday.
At 10 am the September Institute for Supply Management's manufacturing index and August construction spending data is out. Oil and gasoline inventories will be released at 10:35 am.
The Dow, Nasdaq and S&P 500 jumped higher Tuesday, but only managed to regain around half of their severe losses from Monday, when the bailout package was snarled in political wrangling and doubts over its effectiveness surfaced.
Hopes of an alternative bailout package, emerged Tuesday from a group of House Republicans, which could replace the $700 billion bailout for the financial system endorsed by President Bush.
Meanwhile the strain in the money markets worsened with overnight dollar rates rising as high as 6 percent, Reuters reported citing traders in Asia, making it even tougher for banks to secure day-to-day funding.
And hedge-fund managers will get their report cards later as a wave of investors are expected to demand their investments back after disappointing returns from the sector. The funds are holding record levels of cash to meet a flood of redemptions as the end of the month and quarter results are released.
In financial stocks, shares of UBS fell after the bank said it said it was cutting 1,900 jobs. Shares of regional bank National City advanced.
Google shares were reset at $400.52 after Nasdaq said the late pounding in the prior session, which sent the stock down to $341.43, was due to "erroneous orders" that it is now canceling.
It's already time to start thinking about the holiday-shopping season, and Wal-Mart was out front, annou ncing price cuts on toys.
WEDNESDAY: Auto sales; ISM manufacturing index; construction spending; weekly crude inventories; Eid (Muslim) holiday
THURSDAY: Short-selling ban expires at 11:59 pm ET; ECB announcement; jobless claims; factory orders; natural-gas inventories; Fed's Bullard speaks; earnings from Constellation Brands
FRIDAY: August jobs report; ISM services index; earnings from Family Dollar
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